First Market Crash

On this day in 1792, Wall Street had its first major crash in history, on "Black Monday," as Treasury bonds lost 10% of their value and shares in the Bank of the United States dropped 12%. 

The Panic of March 19, 1792

Prior to the Financial Crisis of 1791–92, the Bank of the United States over-expanded its credit creation, which led to a speculative rise in the securities market. When a number of speculators ultimately defaulted on their loans, it set off panic selling of securities. In response, then-Secretary of the Treasury Alexander Hamilton cajoled many banks into granting discounts to those in need of credit in multiple cities, in addition to utilizing numerous policies and other measures to stabilize U.S. markets. 

First Credit Crisis

The Panic of 1792 was the first credit crisis in the US Stock Market. It occurred during the months of March and April 1792. The first market crash was precipitated by the expansion of credit by the newly formed Bank of the United States. With rampant speculation on the part of William Duer, Alexander Macomb, and other prominent bankers at the time. 

Duer, Macomb, and other speculators tried to inflate prices of US debt securities and bank stocks. They defaulted on their loans causing prices to fall which caused a "run on the bank". 

At the same time, the Bank of the United States was "tightening credit" which (as always) intensified the initial panic of 1792. 

Alexander Hamilton was Secretary of the Treasury at that time. Hamilton jumped into action by providing banks with "easy money" which allowed the banks to make open-market purchases of securities. Hamilton's actions helped the market to stabilize by May 1792.

First Market Crash TimelineThe Last 100 Year History of Market Crashes. Mostly from Investopedia

When we have a stock market crash, it's often the result of events that cause investors to react out of fear which means selling their securities. Bad news about the economy along with current sentiment and current events always have the potential to set off a chain reaction that leads to a market crash. This type of market crash has happened regularly throughout history. US stock market crashes go all the way back to the 18th century and while there is no official market crash timeline for the US Stock Market here's a few highlights you may find helpful:

Market Crash Highlights

• A Market Crash can have major economic impact and it can take a significant amount of time for "the market" to get back to its pre-crash level.
• The earliest market crash is known as the "Dutch Tulip Bulb Market Bubble". Also known as Tulipmania, which took place in 1637.
• The first US market crash was the Credit Crisis of 1791–92. Some call this market crash "Black...